Northpoint to build 2.2M sf spec industrial park on Southeast Side

The $169M project will reap $25M in tax increment financing

Jul.July 09, 2018 02:00 PM

Northpoint’s Ford manufacturing plant and adjacent site of its new proposed complex with founder and CEO Nathaniel Hagedorn

Northpoint Development has reached a deal with the city for taxpayers to help finance a new six-building, 2.2 million-square-foot industrial complex on the city’s Southeast Side.

The $169 million project will reap about $25.3 million from the Lake Calumet tax increment financing district, according to a Sunday announcement from Mayor Rahm Emanuel’s office.

The Missouri-based industrial developer will build on 196 acres near the corner of the 116th Street and Avenue O in the East Side neighborhood, just north of Northpoint’s existing 2.8-million-square-foot Ford manufacturing plant.

Buildings on the new campus would range between 215,000 and 600,000 square feet, potentially housing multiple tenants each. Northpoint will start with a 361,000-square-foot spec complex in the 12200 block of South Burley Avenue.

Northpoint’s portfolio includes 128 mostly industrial properties spanning more than 21 million square feet across the country. The company was founded in 2012 and lists dozens of complexes built during the past several years.

Their newest planed site is less than a mile from the Indiana state line and about 4 miles south of the 440-acre former site of Chicago’s U.S. Steel manufacturing campus, where Emerald Living’s proposal for a 20,000 new homes fell through earlier this year.

The city in 2016 signed a $1.3 billion contract with Chinese company CRRC Sifang America for CTA train cars that would be built at a nearby factory, but Chinese-American trade tensions have thrown that deal into flux, since some train parts would continue to be built in China. Emanuel is traveling to China this week to try and salvage the agreement.

Industrial rents are surging citywide, hitting a record high last quarter of $5.58 per square foot despite more than 2 million square feet of new space coming onto the market during the same period. That was after the submarket around O’Hare Airport led a 38 percent year-over-year spike in metro-wide industrial leasing during the first quarter of this year, thanks in part to the e-commerce industry’s insatiable demand for distribution centers.

A representative of Northpoint did not immediately respond to a request for comment.

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